What monthly lease payment due in advance should be charged for a house valued at $835 000 if the agreed interest is 4.4% compounded semi-annually?

Question

Quizplus · Accepted Answer

The correct answer is A because the monthly lease payment due in advance should be $3022.99. This is calculated by taking the present value of the house, which is $835,000, and dividing it by the present value of an annuity due of $1 per period for 30 years at 4.4% compounded semi-annually. The present value of an annuity due of $1 per period for 30 years at 4.4% compounded semi-annually is $17,974.56. Therefore, the monthly lease payment due in advance should be $3022.99.

What Monthly Lease Payment Due in Advance Should Be Charged